Probably yes, from a nominal valuation perspective. No, if time-to-liquidity was the primary goal.

On the one hand, Instagram is clearly as impactful, plus or minus, as Snapchat and Pinterest, which are now both at valuations 3-4x what Instagram sold for.

On the other hand, Instagram had zero revenue and it's not clear anyone would pay more than $1b to buy it. Yahoo! paid $1b for Tumblr and Twitter could have upped its offer. But it's hard to see a $2-$3b+ offer even in '13/'14 though of course it's possible. We just haven't reached the level where public companies are paying $3b+ for these properties -- yet. VCs would pay that "price" in today's market but that's not an M&A price.

If they wanted to sell, period, i.e. get liquidity, for the best risk-adjusted price -- I think they got the best deal on the planet at the time. $0 in revenue, handful of employees, short life as Instagram. And they played the Facebook IPO drama to a tee.

If they wanted the best nominal valuation possible, though, they likely sold too early. Even at $0 in revenue.